Up next
Author
Share this @internewscast.com
FacebookXRedditPinterest
Interest rates have been cut for a second time this year, to their lowest since 2023, and future rate cuts could be on the cards.
Treasurer Jim Chalmers said the Reserve Bank of Australia’s (RBA) decision to cut the cash rate to 3.85 per cent from 4.1 per cent will mean someone with a $750,000 mortgage will save $118 a month in reduced repayments
Chalmers said on Tuesday: “This is the second interest rate cut in the last three months. This is very welcome relief for millions of Australians.”

“We are really pleased to see more help is on the way.”

A graph showing interest rates in Australia

How interest rates have risen and fallen in Australia

When asked about potential future cuts, Chalmers said: “The market has expected for some time that there would be multiple interest rate cuts this year.

“That is a matter for the independent Reserve Bank, and it’s a matter for the market and for the economists to make those sorts of assessments.
“The market expects there to be further interest rate cuts, but market expectations change over time.”
The RBA said there was uncertainty about the world economy, saying in its statement following Tuesday’s rates decision: “There is still considerable uncertainty about the final scope of the tariffs and policy responses in other countries.

“The Board evaluated a potential severe downturn and acknowledged that monetary policy is adequately positioned to take decisive action in response to global events, should they significantly impact activity and inflation in Australia.”
Table showing how the rate cut could impact home loan repayments

What the rate cut could mean for borrowers.

In the RBA’s latest quarterly Statement of Monetary Policy, released on Tuesday, the central bank has modelled the impact of ‘trade war’ and ‘trade peace’ scenarios on GDP, unemployment and inflation.

Under the trade war scenario, in which trade conflicts brought about by US tariffs escalate and lead to a protracted trade war, growth “slows sharply”, GDP would be 3 per cent lower than the baseline forecast, and unemployment rises to 6 per cent.
The bank also warned a protracted trade war could fuel global inflationary pressures.
Under the trade peace scenario, there is a swift resolution to trade conflicts resulting in potential increased demand for goods and services in Australia. The bank warns this could potentially fuel inflationary pressures and further expected rate cuts may not follow.
Governor Michele Bullock told reporters: “The key point about the situation we’re in is it’s not just uncertain, it’s actually unpredictable.”
“And so I think in terms of our focus, part of the reason … we put those scenarios in was to demonstrate that the range of outcomes here could be quite wide.

“I’m not putting a strong possibility on a really, really bad outcome, but I think we have to be alert that there might be.”

On trade with the US, Chalmers said: “We engage wherever we can and whenever we can, because this relationship is of mutual economic benefit.”
“We’ve got a lot of skin in the game when it comes to these escalating trade tensions.
“Our gross debt position is better than the US. Our budget balance is better than the US. We’ve got the triple-A credit rating from all three of the agencies.
“The US have just been downgraded by Moody’s [credit rating company].
“We’ve got lower unemployment here, we’ve got stronger employment growth here, and we’ve got lower interest rates here in Australia as well, at the same time as we’ve got similar levels of inflation.
“And so that comparison, I think, is another reminder that Australia is especially well placed and well prepared to deal with all this global uncertainty.”
Share this @internewscast.com
FacebookXRedditPinterest
You May Also Like
People believed trapped after US nursing home explosion

Breaking: Urgent Rescue Efforts Underway After Devastating Explosion at U.S. Nursing Home

There was a gas explosion reported this morning at a nursing home…

Controversy Erupts as UK National Faces Deportation Over Alleged Nazi Symbol Display

The Australian Federal Police (AFP) arrested the 43-year-old earlier this month after…

Albanese Administration Identifies Target Groups in Effort to Curb Hate Speech

The Albanese government has plans to introduce a new legal framework to…
Operation Shelter was first established in October 2023.

Police Intensify Anti-Hate Crime Efforts Following Bondi Incident

NSW Police has conducted more than 2600 taskings surrounding antisemitism and hate…
In a video now amassing more than 1.6 million views, one eager father has been publicly shamed, wrongly accused and humiliated in front of other shoppers at a festive charity drive organised by  well-known reality TV star and one of Australia's strongest men, Jaden Laing

Reality TV Star’s $10,000 Christmas Gesture Goes Awry as Father’s Public Embarrassment Unfolds Unexpectedly

A festive charity initiative by a reality TV personality has spiraled into…
SYDNEY, AUSTRALIA - DECEMBER 21: General view of the memorial at Bondi Pavilion on December 21, 2025 in Sydney, Australia. Life slowly returned to normal at Bondi Beach, with people from all walks of life still paying respects and tributes as raw grief and funerals gave way to quiet commemorations. Police say at least 16 people, including one suspected gunman, were killed and more than 40 others injured when two attackers opened fire near a Hanukkah celebration at the world-famous Bondi Beach, i

Aussie Perspectives: New Poll Unveils Public Opinion on Terrorism Responsibility in Australia

Two thirds of Australians blame either extremists or the Albanese government and…
The search was scaled back at 1pm today.

Efforts to Locate Missing Fisherman off NSW South Coast Reduced After Three-Day Search

The multi-agency search for a rock fisherman who was last seen on…

Trump’s Appointment of Greenland Envoy Triggers Diplomatic Controversy

US President Donald Trump has named Louisiana governor Jeff Landry as his…
NSW Premier doubles down on gun reforms, says more changes are imminent

NSW Premier Advocates for Stricter Gun Laws: Major Reforms on the Horizon

Chris Minns has described NSW‘s newly passed gun reforms as “the toughest…

Revealed: Trump’s Frequent Flights on Epstein’s Jet – New Records Uncover Hidden Details

United States President Donald Trump flew on sex offender Jeffrey Epstein’s private…

Essential Guide to Buying Sunglasses: What You Need to Know for Ultimate Eye Protection and Style

With summer well and truly here, you might be in the market…
Police were called to Westfield Miranda shopping centre yesterday afternoon.

Closures and Openings: What to Expect from Now Through the New Year

The Christmas retail season is finally here, with one day of last-minute…